Even though mortgage rates these days are incredibly low, many people are missing the chance to take full advantage of it. Why? Because they don’t have an acceptable credit score for mortgages. So what kind of score do you need to get the mortgage you want?

That tiny little three-digit number means a whole lot to those who lend money. It shows them how credit worthy you are and until recently, a FICO score of 720 meant you could lock down great rates and terms for loans and mortgages.

Unfortunately, with the banks in crisis, lenders are looking for a credit score up around 740 before they are willing to offer great rates. That doesn’t mean you’re out of luck if you’re score is slightly lower. It just means your rates will be higher. Unless you have a score below 580, you should still be able to get the loan or mortgage you need.

In the United States, the average credit score is a healthy 720 according to the company that developed the FICO scale. That means 50 percent of people have a score higher than 720 and the other 50 percent score lower. The scale ranges from 300 (worst score) to 850 being the perfect score.

Having a decent credit score is important for more than just mortgages. It is used by insurance companies to determine your premiums, landlords, and some employers.

If you need to raise your credit score here are a few simple tips to remember:

Keep an eye on your credit report – errors on your report can damage your credit.

Apply for a credit card and use it wisely – pay off the balance and avoid interest charges.

Set up your accounts for automatic payment – keeps payments on time every month.

Keep your finances out of collections – this can be devastating for credit score.

Don’t use all your available credit – lenders like to see a difference between what you have access to and what you use.

Use less than 30 percent of your available credit – under 10 percent is even better!

Follow these tips for lowering your score and you can get it above 720 in no time!

If you’re about to make a major purchase, you may be wondering, “Do I need to check my credit?” The answer is, yes. It is always better to go into any financial negotiation with a complete understanding of your credit history. Without doing this, you could find yourself turned down for financing that is very important to you and not know why.

A credit agency can supply a credit report to you, quickly and easily. On the report you will find accounts of your payment history on any and all of your loans and credit cards. You will also be able to see your credit score. This is a number that lenders use when deciding whether or not to approve you for a loan or credit card.

Now that you know that you should check your credit, you may be wondering, “How do I check my credit?” The answer is easy. There are several credit agencies that will provide you with a credit report if you ask. You can obtain a free credit report once a year from most of these agencies.

It is also a good idea when you get your report, to check for inaccurate charges that you may not have even made… Credit card fraud and identity theft are on the rise so it is always a good idea to check your credit report once in a while.

If you find there are some problems with your credit, such as late payments or bad accounts, you can put together a plan of action to start correcting these problems before applying for any further credit, thus greatly increasing your chanced for approval.

By showing that you are taking some positive actions, you will be starting to rebuild positive credit. This always looks good to lenders and banks. It could mean the difference between owning that home of your dreams, or that car of your choice, and being sadly disappointed if you are not approved.